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Top 5 Benefits of Current Account for Start-Ups
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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As soon as any start-up registers its company, it is inundated with plenty of business Current Account choices from distinct banks over email, call, or SMS. It is very easy to get confused when picking up the suitable Current Account for your startup owing to the provision of various features and options. However, to make the correct choice, you must zero on those features and benefits, which your business would frequently require.
Key Benefits of Current Account For Startups:
Conduct Regular Transactions And Withdrawals With Ease
With zero limit on transactions, your Current Account is one of the best solutions for all your business needs. May it be immediate fund transfer via NEFT or RTGS, online transactions, multi-city transfer, you instantly can do it with these services at zero cost. For such transfers, you can even choose to make transactions through cheque, demand draft etc. at no additional cost. Also, free cash withdrawal is allowed at home branches or non-home branch locations.
Make Higher Number of Transactions Without Any Worry
Current Accounts allow you to make a higher number of transactions than savings bank accounts. As in a business, often huge numbers of transactions take place; this flexibility in transactions offered by the Current Account can be useful in ensuring a successful deal.
Provision of Overdraft Facility
Overdraft option is provided by banks on your Current Account to withdraw a higher amount over your Current Account balance. This option assists you to meet distinct business expenses, pay your staff salaries on time, etc. in events of inadequate working capital or delay in receiving payments. Further, this option even assists you to preserve your business reputation.
Thus, make sure to request for a higher overdraft limit on your Current Account. Note that as interest is charged on just the amount used through the overdraft, selecting a higher overdraft limit will not levy any expense. You can repay your borrowed overdraft amount in the form of EMI based upon your convenience.
Helps Boost Your Credibility
Before assigning you any work, other companies might ask you to provide a creditworthiness letter. This letter may be issued by your bank with whom you share a long-lasting banking relationship in the form of a Current Account. Thus, if your relationship with your bank is good, it may issue a credibility letter to show your creditworthiness concerning your finances.
Additional Read: Why Having Multiple Current Accounts is Good
Provide Business Legitimacy
For a startup, maintaining a Current Account helps to separate business accounts from personal accounts, which ensures clean bookkeeping. Besides this, issuing cheques, and fund transfers to partners and vendors through Current Account also allow you to build a professional image.
Bottom line
Current Account for startups come with numerous benefits. It offers assurance of constant cash flow and removes the need to worry regarding the daily transaction limits. Besides these other crucial benefits include provision of home banking services i.e., free cheque or cash pick up from home and delivery, free outward cheque returns up to a specified limit, free access to domestic VISA ATMs with the issued debit card, free 24X7 net banking, SMS, and mobile banking services, free alerts through SMS and email, best forex rates etc. Provision of overdraft facility is also a major benefit of a Current Account that assures business stability.
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